This site uses cookies to provide you with a more responsive and personalised service.
By using this site you agree to our use of cookies.
Please read our cookie notice for more information
on the cookies we use and how to delete or block them.

The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

IFRS 10/IAS 28 — Investment entity amendments

Background

This narrow scope project involves a number of potential amendments to IFRS 10Consolidated Financial Statements and IAS 28Investments in Associates and Joint Ventures (2011) to address issues that have arisen in relation to the exemption from consolidation for investment entities:

Whether an investment entity parent should account for an investment entity subsidiary at fair value, when the subsidiary provides investment-related services to third parties

The interaction between the investment entity amendments and the exemption from preparing consolidated financial statements requirements in IFRS 10

Whether a non-investment entity must ‘unwind’ the fair value accounting of its joint ventures or associates that are investment entities.

Current status of the project

This project has been completed. The IASB issued Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) on 18 December 2014.

The Board was asked to confirm that all necessary due process steps had been met. When asked whether anybody intended to dissent, one Board member indicated considering dissenting from the publication. The exposure draft is expected towards the end of June with a comment period of no more than 90 days.

The Board was presented several issues stemming from recent discussions of the IFRS Interpretations Committee, the majority of which related to cross-cutting issues on investment entities. Some issues were follow-up issues from the February Board meeting.

The Committee discussed whether the exemption is applicable if its ultimate or any intermediate parent is an investment entity which prepares consolidated financial statements but measures investees at fair value and whether the intermediate parent loses the exemption if the ultimate parent does not present consolidated financial statements.

The Committee discussed an amendment to IFRS 10 that require an investment entity to measure its investments in subsidiaries at fair value apart from where a subsidiary provides investment-related services or activities.